Joel Julien

"When pub­lic and pri­vate sec­tor goals are aligned great things can hap­pen."

So said Gre­go­ry N. Hill the man­ag­ing di­rec­tor of ANSA Mer­chant Bank in an in­ter­view with the Busi­ness Guardian (BG) as he hailed the mer­its of the pri­vate-pub­lic part­ner­ship mod­el of project de­vel­op­ment in ad­vanc­ing na­tion­al goals .

"The pub­lic sec­tor is the dri­ving force for busi­ness to suc­ceed, while the pri­vate sec­tor pro­vides cap­i­tal, ex­per­tise, em­ploy­ment and tax rev­enues for the long-term vi­a­bil­i­ty of all stake­hold­ers," Hill ex­plained.

"The pan­dem­ic has made it clear that we should be much more in­vest­ed in seek­ing part­ner­ships on a re­gion­al lev­el. The road to ex­pan­sion, di­ver­si­fi­ca­tion and in­come equal­i­ty for Caribbean na­tions de­pends on us cap­i­tal­is­ing on the strengths of each coun­try and com­ing to­geth­er to pro­mote and buy in­to our ca­pa­bil­i­ties and tal­ents. This ap­plies do­mes­ti­cal­ly and re­gion­al­ly.

"For ex­am­ple, giv­en the ev­i­dence pro­vid­ed by the pan­dem­ic, an im­me­di­ate area of ne­ces­si­ty is mak­ing sus­tain­able health­care ac­ces­si­ble to the most un­der­served com­mu­ni­ties across the re­gion. This can be de­liv­ered via pub­lic-pri­vate part­ner­ships. Sim­i­lar­ly, part­ner­ship co-in­vest­ment in cross-bor­der dig­i­tal bank­ing tech­nol­o­gy and pay­ment plat­forms fa­cil­i­tat­ed by re­gion­al reg­u­la­tors and gov­ern­ments is an­oth­er great place to start to bring us all to­geth­er in part­ner­ship."

Hill said ANSA Mer­chant Bank has al­ways part­nered with its clients both re­gion­al­ly and do­mes­ti­cal­ly in joint ven­tures and part­ner­ships wher­ev­er pos­si­ble.

"We have ex­e­cut­ed var­i­ous forms of pub­lic-pri­vate part­ner­ships us­ing BOLTs (Build Own Lease Trans­fer), BOOTs (Build Own Op­er­ate Trans­fer) and oth­er off-bal­ance sheet fi­nan­cial and op­er­at­ing struc­tures. Gen­er­al­ly, banks can part­ner with large con­trac­tors and de­vel­op­ers to un­der­take sig­nif­i­cant in­fra­struc­ture projects, such as util­i­ties in­fra­struc­ture, trans­porta­tion and even hos­pi­tals."

These av­enues for key project ex­e­cu­tion, he said, pro­vide a cre­ative chan­nel for gov­ern­ment to im­ple­ment strate­gic in­fra­struc­ture projects but avoid hav­ing to fund these projects it­self or to source fund­ing on the bal­ance sheet of the sov­er­eign di­rect­ly.

"This al­lows for a more mod­est Debt to GDP ra­tio of the sov­er­eign (which im­pacts the sov­er­eign glob­al risk rat­ings), while at the same time al­low­ing for Con­struc­tion and Com­ple­tion Risk to be passed on to the con­trac­tor or de­vel­op­er. This is a valu­able way for the sov­er­eign to mit­i­gate against the huge cost over­runs nor­mal­ly as­so­ci­at­ed with Gov­ern­ment Guar­an­teed or spon­sored in­fra­struc­ture projects.

"This is­sue is ev­i­dent across the re­gion and hence more pub­lic-pri­vate part­ner­ships, joint ven­tures, State Pri­vati­sa­tions and State Con­ces­sion Agree­ments should be ex­plored with­out fur­ther de­lay across CARI­COM, as these op­por­tu­ni­ties for risk mit­i­ga­tion are not unique to our coun­try. At ANSA Mer­chant Bank we are at the dis­pos­al of the re­gion to play our part in mak­ing the vi­sion of a more dy­nam­ic in­vest­ment and cap­i­tal mar­ket – and a more in­clu­sive dis­tri­b­u­tion of re­sources – a re­al­i­ty, and to sup­port the fu­ture re­silience of our so­ci­ety."

An aerial view of Port-of-Spain.

Hill said ANSA Mer­chant Bank is al­ways look­ing for chan­nels through which it can al­lo­cate fund­ing in­to new and di­ver­si­fied ar­eas of busi­ness.

"Gov­ern­ment sup­port and pol­i­cy can be a ma­jor dri­ver of this prac­tice via, for in­stance, al­lowance of tax free bonds for the fi­nanc­ing of spe­cif­ic projects or sec­tors or even tax in­cen­tives on the fi­nanc­ing it­self for the fi­nan­cial in­sti­tu­tions play­ing in the cap­i­tal mar­ket to fund new ar­eas of eco­nom­ic di­ver­si­fi­ca­tion.

"Nat­u­ral­ly, there will be calls for fi­nan­cial in­sti­tu­tions to of­fer more sup­port to lo­cal en­tre­pre­neurs by a vis­i­ble will­ing­ness to take on more lev­el of risk, to of­fer low­er fi­nanc­ing rates, and to help these types of busi­ness­es in dif­fi­cult times by work­ing with them to find vi­able so­lu­tions to their chal­lenges. It re­quires all hands on deck re­al­ly."

Hill said the pan­dem­ic has taught Ansa Mer­chant that all are "vul­ner­a­ble from an eco­nom­ic and so­cial per­spec­tive."

"We must com­pete for our very sur­vival, not on­ly as in­di­vid­u­als, but on a na­tion­al and re­gion­al lev­el. Caribbean-wide, we must pull to­geth­er to at­tract sig­nif­i­cant for­eign di­rect in­vest­ment to our bor­ders, hope­ful­ly in greater num­bers than the virus was able to pen­e­trate them. We have strength in num­bers and our in­di­vid­ual na­tion­al poli­cies must en­gen­der re­gion­al and do­mes­tic col­lab­o­ra­tion across bi-par­ti­san lines."

Hill said T&T's bank­ing com­mu­ni­ty is quite ca­pa­ble of as­sess­ing projects and in­vest­ments of in­ter­na­tion­al ori­gin and scale and there­fore the na­tion­al bud­get should fa­cil­i­tate the widen­ing of lend­ing and in­vest­ing pa­ra­me­ters, not on­ly for the banks, but for in­sur­ance com­pa­nies and pen­sion plans, with ap­pro­pri­ate pol­i­cy in­cen­tives to do so.

"Dri­ving lo­cal con­tent via the use of our do­mes­tic fi­nan­cial ser­vices sec­tor is a great way to mul­ti­ply cap­i­tal and ex­per­tise. Our Bud­get should im­me­di­ate­ly fo­cus on in­no­v­a­tive and im­pact­ful stim­uli and in­cen­tives for for­eign di­rect in­vest­ment that af­ford ef­fi­cient move­ment of cap­i­tal to our shores, cou­pled with red-car­pet poli­cies to wel­come new and emerg­ing glob­al en­ter­pris­es which specif­i­cal­ly align to our proven clus­ters of eco­nom­ic ex­cel­lence. This much need­ed cap­i­tal in­jec­tion should build the an­ti­bod­ies for the fu­ture health and sur­vival of our econ­o­my."

Hill said with a long-term per­spec­tive and pro­grammes to not just fa­cil­i­tate but en­cour­age for­eign di­rect in­vest­ment along­side do­mes­tic pri­vate sec­tor lo­cal con­tent par­tic­i­pa­tion, the econ­o­my should see an over­all net in­crease in for­eign cap­i­tal.

"With this fo­cus and growth in for­eign di­rect in­vest­ment in­to our econ­o­my, the de­mand and sup­ply bal­ance for hard cur­ren­cy will be­gin to tip in a much need­ed di­rec­tion, re­duc­ing the un­sat­is­fied de­mand for US dol­lars. If gov­ern­ment pol­i­cy sup­ports the chan­nelling of this fo­cus and en­er­gy in­to ex­port dri­ven busi­ness­es, this will shift the bal­ance of trade in the right di­rec­tion and al­le­vi­ate for­eign cur­ren­cy short­ages, but it will take time. These de­lib­er­ate in­ter­ven­tions will di­rect­ly im­pact the lives of man­u­fac­tur­ers, dis­tri­b­u­tion and lo­gis­tics com­pa­nies, and the gen­er­al pub­lic."

As such he said the bank­ing sec­tor can play two piv­otal roles in this cur­ren­cy equa­tion: first­ly, adding lever­age from the lo­cal mar­ket along­side for­eign cap­i­tal to im­prove the re­turn on in­vest­ment to all stake­hold­ers to pro­mote these new in­dus­tries; and sec­ond­ly, to en­sure a more eq­ui­table dis­tri­b­u­tion of hard cur­ren­cy to cit­i­zens.

Hill said the need to di­ver­si­fy the econ­o­my out of the de­pen­dence on Oil and Gas to cre­ate ad­di­tion­al av­enues to earn more for­eign ex­change is a pri­or­i­ty for all.

He said through­out the pan­dem­ic, ANSA Mer­chant Bank re­mained stead­fast in its com­mit­ment to its core val­ues for both our in­ter­nal and ex­ter­nal stake­hold­ers.

"Our strengths have al­ways been our sense of so­cial re­spon­si­bil­i­ty, our fi­nan­cial sta­bil­i­ty and the com­mit­ment of our team to de­liv­er ex­cep­tion­al per­for­mance and un­matched ser­vice de­spite the head­winds."

Port of Port-of-Spain

SHIRLEY BAHADUR

Hill said rel­a­tive to the mar­kets in which ANSA Mer­chant com­petes, it did ex­treme­ly well ac­cord­ing to key per­for­mance in­di­ca­tors, in­clud­ing a sig­nif­i­cant re­bound in Prof­it Be­fore Tax, en­hanced ef­fi­cien­cy of op­er­a­tional ac­tiv­i­ties, and by de­liv­er­ing on our promise of ser­vice in­no­va­tion and en­hanced use of tech­nol­o­gy.

ANSA Mer­chant reg­is­tered $161 mil­lion in Prof­it Be­fore Tax year to date as at June 30, 2021, com­pared to $46 mil­lion as at June 30, 2020.

"We have dis­cov­ered and are quite proud about the depth of re­silience and in­no­v­a­tive­ness of our ANSA Mer­chant Bank team and cit­i­zens in gen­er­al, and their abil­i­ty to unite in the face of a cri­sis. At a na­tion­al and cor­po­rate lev­el, the key les­son is that op­er­a­tions and sys­tems must be proac­tive­ly and thor­ough­ly test­ed, with but­tress­es to with­stand the im­pact of un­script­ed glob­al events…be it a pan­dem­ic, a cli­mate change dis­as­ter, a geo-po­lit­i­cal out­break or any­thing else in the re­gion­al or in­ter­na­tion­al are­nas. In short, with mod­ern tech­nol­o­gy, timeta­bles will al­ways be com­pressed – a valu­able les­son for all for the fu­ture."

Spe­cif­ic strate­gies Hill sug­gest­ed can be used to cre­ate ad­di­tion­al av­enues to earn more for­eign ex­change in­clude:

· Not just de­vel­op a strate­gic map as a guide to­wards the coun­try’s eco­nom­ic di­ver­si­fi­ca­tion agen­da, but ex­e­cute same with as­so­ci­at­ed mile­stones and time­lines;

· In­clude in this strate­gic map the per­cent­age spilt of GDP that the di­ver­si­fi­ca­tion would aim to achieve over time as a de­lib­er­ate tar­get and work to­wards same;

· Pri­or­i­tize re­search and de­vel­op­ment in­to new ar­eas of eco­nom­ic ac­tiv­i­ty, such as al­ter­na­tive en­er­gy sources, to repri­or­i­tize the use of avail­able nat­ur­al gas re­sources, greater in­vest­ment in agri­cul­ture for food sus­tain­abil­i­ty, ex­pan­sion of the ed­u­ca­tion sec­tor to bring in for­eign stu­dents pay­ing hard cur­ren­cy and con­sum­ing lo­cal prod­ucts, and, of course, ex­e­cu­tion of a plan to make To­ba­go a pre­mier hol­i­day des­ti­na­tion;

· Pro­vide at­trac­tive in­cen­tives for busi­ness­es which are net earn­ers of for­eign ex­change, par­tic­u­lar­ly those that ex­port their prod­ucts and ser­vices to boost our bal­ance of trade and sup­port the for­eign cur­ren­cy sup­ply side dy­nam­ics;

· En­cour­age do­mes­tic pro­duc­tion of goods and ser­vices for ex­port and lo­cal con­sump­tion where, as a Na­tion, we al­ready have a com­pet­i­tive ad­van­tage. This could in­clude spe­cif­ic agri­cul­tur­al prod­ucts, large-scale food pro­cess­ing, an­i­mal hus­bandry, and se­lect light in­dus­tri­al ac­tiv­i­ties to build up our SMEs, es­pe­cial­ly in the ar­eas of cloth­ing, shoes, fur­ni­ture, lum­ber, lo­cal fruits us­age, and so on. Grow­ing the sup­ply and de­mand (taste) for lo­cal pro­duc­tion should al­so sup­port the for­eign cur­ren­cy on the de­mand side of the equa­tion;

· Pro­vide at­trac­tive in­cen­tives for ‘green’, sus­tain­able projects, par­tic­u­lar­ly those that are like­ly to gen­er­ate or use al­ter­na­tive en­er­gy sources, such as so­lar or re­cy­cled ma­te­r­i­al. Re­ward­ing busi­ness­es for in­vest­ing in sus­tain­able busi­ness prac­tices is where the fu­ture of pol­i­cy al­so needs to fo­cus. Our chil­dren are de­pend­ing on us to make the right de­ci­sions for their fu­ture, to­day;

· En­cour­age and sup­port the pro­duc­tion and ac­cess to in­de­pen­dent sources of da­ta across so­ci­ety (em­ploy­ment sec­toral rates, pop­u­la­tion seg­men­ta­tion, con­sump­tion trends and the like) and with less lag time. This is a ma­jor source of in­ef­fi­cien­cy, where da­ta is not read­i­ly avail­able to sup­port de­ci­sion mak­ing and busi­ness plan­ning.